Ad Spending Off 5.2% | Adweek Ad Spending Off 5.2% | Adweek
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Ad Spending Off 5.2%

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NEW YORK -- Total spending on advertising across all media in the U.S. fell 5.2% to $22.6 billion in the first quarter ended March 31, compared with the $23.8 billion companies spent advertising their brands and products in the same period a year earlier, Friday's Wall Street Journal reported.

The data were collected by CMR of New York, a Taylor Nelson Sofres company that tracks ad spending on television, in magazines and newspapers and via other media outlets.

The spending figures are an important signal to Wall Street as well as Madison Avenue. Both scrutinize advertising trends, which are regarded as an important measure of economic health. Companies often slash their ad budgets when they miss their sales or profit targets. Those cutbacks, in turn, can lead to a prolonged recession for the media outlets that depend on advertising revenue to survive.

According to CMR, a number of top advertisers made big changes to their budgets during the first quarter. General Motors Corp. (GM), the country's biggest advertiser, slashed its spending by nearly 24%, according to the data. The Detroit marketer of Buick, Saab, Cadillac and Pontiac, among other brands, pumped $516.1 million into advertising in the first three months of this year. While that outlay was greater than that of any other corporation, it was down sharply from the $676.2 million GM spent on advertising in the same period a year ago.

General Motors spokeswoman Peg Holmes said much of the reduction in advertising reflected the auto maker's decision to take ad dollars from national campaigns in favor of local marketing programs. "That's our current focus, and it follows our business strategy," she said. Overall, she added, the company's total marketing budget for the year is expected to remain the same.

Philip Morris Cos. (MO), the New York parent of Kraft Foods, Miller Brewing Co. and several cigarette brands, including Marlboro, also made big cuts, according to the data. The company spent $346.9 million in the first quarter, nearly 28% less than the $480.6 million spent a year earlier. A company spokeswoman said she couldn't comment because of a quiet period related to a public offering of Kraft shares.

Spending at Procter & Gamble Co. (PG) slipped 5.4% to $365.2 million from $385.8 million. The packaged-goods concern, based in Cincinnati, markets such household brands as Crest toothpaste, Pampers diapers, Tide detergent and Pringles potato chips. A spokesman said the company wouldn't address the question of whether it made any big changes to its ad spending.

Copyright (c) 2001 Dow Jones & Company, Inc.